(Photo: U.S. Army Corps of Engineers Los Angeles District / Flickr)Investigators for a bipartisan subcommittee on homeland security found that regional intelligence-gathering offices have failed to identify terrorist threats, violated Americans' civil liberties and largely wasted taxpayers' money.

Fusion centers, the centerpiece of one of the nation's domestic counterterrorism programs, came under fire in a blistering congressional report released today by the Senate Homeland Security and Governmental Affairs subcommittee on investigations.

The bipartisan committee launched a probe in 2009 to determine what kind of impact fusion centers have had on the intelligence community's efforts to thwart terrorist plots. The resulting 146-page report, which is highly critical of the Department of Homeland Security (DHS), was released by Sen. Carl Levin, D-Michigan, the subcommittee's chairman, and Sen. Tom Coburn, R-Oklahoma, the ranking minority member, who led the investigation.

The centers were created in the wake of the 9/11 attacks to serve as regional focal points for "the receipt, analysis, gathering and sharing of threat-related information among federal, state, local, tribal, and territorial (SLTT) partners," according to the web site for DHS, which is responsible for oversight of the centers.

According to the report, DHS officials overstated the fusion centers' "success stories" and "asserted that some fusion centers existed when they did not."

Of the reported 72 state and local centers scattered across the country, four apparently exist only on paper, according to the report.

Subcommittee investigators reviewed 610 fusion center reports prepared between April 2009 and April 2010 and looked at training and policies. What they uncovered was disturbing, according to the report.

The inquiry was unable to account for a vast majority of the funds the federal government has spent on fusion centers between 2003 and 2011.

DHS was "unable to produce a complete and accurate tally of the expense of its support for fusion centers," the report stated.

The panel was forced to rely on a rough estimate: between $289 million and $1.4 billion. Fusion centers are primarily funded through grants administered by the Federal Emergency Management Agency (FEMA).

Money earmarked for domestic counterterrorism efforts was used to purchase gadgets such as "hidden 'shirt button'" cameras, "cell phone tracking devices and other surveillance equipment unrelated to the analytical mission of a fusion center," as well as laptop computers, dozens of flat-screen televisions and sport utility vehicles.

The report noted DHS officials told subcommittee investigators that under FEMA's "rules and guidance" those expenditures were permitted.

Despite scrutinizing more than a year's worth of reporting from the fusion centers "the subcommittee investigation could identify no reporting which uncovered a terrorist threat, nor could it identify a contribution such fusion center reporting made to disrupt an active terrorist plot."

Instead, the investigation found:

• Nearly a third of all reports - 188 out of 610 - were never published for use within DHS and by other members of the intelligence community, often because they lacked any useful information, or potentially violated department guidelines meant to protect Americans' civil liberties or Privacy Act protections.

• In 2009, DHS instituted a lengthy privacy and civil liberties review process that kept most of the troubling reports from being released outside of DHS; however, it also slowed reporting down by months, and DHS continued to store troubling fusion center-generated intelligence reports on US citizens, possibly in violation of the Privacy Act.

• During the period reviewed, DHS intelligence reporting suffered from a significant backlog. At some points, hundreds of draft intelligence reports sat for months before DHS officials made a decision about whether to release them to the intelligence community. DHS published many reports so late - typically months late, but sometimes nearly a year after they were filed - that many were considered "obsolete" by the time they were released.

• Most reporting was not about terrorists or possible terrorist plots, but about criminal activity, largely arrest reports pertaining to drug, cash or human smuggling.

• Some terrorism-related "intelligence" reporting was based on older news releases or media accounts.

• Some terrorism-related reporting also appeared to be a slower-moving duplicate of information shared with the National Counterterrorism Center through a much quicker process run by the Federal Bureau of Investigation's (FBI's) Terrorist Screening Center.

The report cites instances where fusion centers collected intelligence and prepared draft reports about the titles of books American Muslims read and a US citizen who gave a motivational speech and lecture on "positive parenting" at a Muslim organization; the information was then illegally retained on government computers at DHS headquarters.

A fusion center in California wrote a report on an infamous motorcycle gang known as the Mongols, which had distributed flyers to its members advising them to be "courteous" if stopped by police officers.

"There is nothing illegal or remotely objectionable in this report," a DHS analyst wrote on a copy of a copy of the draft report about the information collected on the motorcycle club. "The advice given to the groups' members is protected by the First Amendment. The organization does not advocate the violation of ANY laws - on the contrary, they tell their members to obey the law."

Civil liberties groups, notably the American Civil Liberties Union, have long raised concerns about the way fusion centers often infringe on Americans' privacy and free speech, claiming the centers operate "with little oversight at a time when new technology, government powers and zeal in the 'war on terrorism' are combining to threaten our privacy at an unprecedented level and turn America into a surveillance society."

The subcommitte agreed with that assessment and said DHS failed to "adequately implement a fusion center program that would produce the results it promised."

However, Congress, "which has repeatedly chosen to support and praise fusion center efforts, without providing the oversight and direction necessary to make sure those efforts were cost effective and useful," also bears "significant responsibility for these failures," the report said.

However, in thousands of pages of documents Truthout obtained from DHS under the Freedom of Information Act (FOIA), fusion centers were shown to be at the center of what some DHS officials said was unconstitutional surveillance involving the Occupy Wall Street (OWS) movement, beginning in September 2011. Some of those documents are emails that show Chandler was aware that fusion centers might have been skirting the law by collecting intelligence and issuing unauthorized reports on OWS.

The integrity of the fusion centers' reports was also criticized by current and former officials interviewed by the subcommittee. One DHS official told subcommittee investigators that "a lot of the [fusion center reporting] was predominantly useless information," while a former fusion center branch chief, who said he was sometimes "proud of the intelligence his unit produced," admitted "there were times when it was, 'what a bunch of crap is coming through.'"

DHS officials apparently were aware of the "deficiencies" at fusion centers but withheld the information from Congress.

"Regarding the centers themselves, the subcommittee investigation learned that a 2010 assessment of state and local fusion centers conducted at the request of DHS found widespread deficiencies in the centers' basic counterterrorism information-sharing capabilities," the report said. "DHS did not share that report with Congress or discuss its findings publicly. When the subcommittee requested the assessment as part of its investigation, DHS at first denied it existed, then disputed whether it could be shared with Congress, before ultimately providing a copy."

The Senate subcommittee report, while scathing, doesn't call for DHS to stop supporting and funding fusion centers. Rather, the report calls for Congress and DHS to "revisit the statutory basis for DHS support of fusion centers." The report also suggested DHS "improve its oversight of federal grant funds supporting fusion centers; conduct promised assessments of fusion center information-sharing; and strengthen its protection of civil liberties in fusion center intelligence-reporting."

Jason Leopold is the author of the Los Angeles Times bestseller, News Junkie, a memoir. Visit jasonleopold.com for a preview. His most recent investigative report, "From Hopeful Immigrant to FBI Informant: The Inside Story of the Other Abu Zubaidah," is now available as an ebook. Follow Jason on Twitter: @JasonLeopold.

(Photo: U.S. Army Corps of Engineers Los Angeles District / Flickr)Investigators for a bipartisan subcommittee on homeland security found that regional intelligence-gathering offices have failed to identify terrorist threats, violated Americans' civil liberties and largely wasted taxpayers' money.

Fusion centers, the centerpiece of one of the nation's domestic counterterrorism programs, came under fire in a blistering congressional report released today by the Senate Homeland Security and Governmental Affairs subcommittee on investigations.

The bipartisan committee launched a probe in 2009 to determine what kind of impact fusion centers have had on the intelligence community's efforts to thwart terrorist plots. The resulting 146-page report, which is highly critical of the Department of Homeland Security (DHS), was released by Sen. Carl Levin, D-Michigan, the subcommittee's chairman, and Sen. Tom Coburn, R-Oklahoma, the ranking minority member, who led the investigation.

The centers were created in the wake of the 9/11 attacks to serve as regional focal points for "the receipt, analysis, gathering and sharing of threat-related information among federal, state, local, tribal, and territorial (SLTT) partners," according to the web site for DHS, which is responsible for oversight of the centers.

According to the report, DHS officials overstated the fusion centers' "success stories" and "asserted that some fusion centers existed when they did not."

Of the reported 72 state and local centers scattered across the country, four apparently exist only on paper, according to the report.

Subcommittee investigators reviewed 610 fusion center reports prepared between April 2009 and April 2010 and looked at training and policies. What they uncovered was disturbing, according to the report.

The inquiry was unable to account for a vast majority of the funds the federal government has spent on fusion centers between 2003 and 2011.

DHS was "unable to produce a complete and accurate tally of the expense of its support for fusion centers," the report stated.

The panel was forced to rely on a rough estimate: between $289 million and $1.4 billion. Fusion centers are primarily funded through grants administered by the Federal Emergency Management Agency (FEMA).

Money earmarked for domestic counterterrorism efforts was used to purchase gadgets such as "hidden 'shirt button'" cameras, "cell phone tracking devices and other surveillance equipment unrelated to the analytical mission of a fusion center," as well as laptop computers, dozens of flat-screen televisions and sport utility vehicles.

The report noted DHS officials told subcommittee investigators that under FEMA's "rules and guidance" those expenditures were permitted.

Despite scrutinizing more than a year's worth of reporting from the fusion centers "the subcommittee investigation could identify no reporting which uncovered a terrorist threat, nor could it identify a contribution such fusion center reporting made to disrupt an active terrorist plot."

Instead, the investigation found:

• Nearly a third of all reports - 188 out of 610 - were never published for use within DHS and by other members of the intelligence community, often because they lacked any useful information, or potentially violated department guidelines meant to protect Americans' civil liberties or Privacy Act protections.

• In 2009, DHS instituted a lengthy privacy and civil liberties review process that kept most of the troubling reports from being released outside of DHS; however, it also slowed reporting down by months, and DHS continued to store troubling fusion center-generated intelligence reports on US citizens, possibly in violation of the Privacy Act.

• During the period reviewed, DHS intelligence reporting suffered from a significant backlog. At some points, hundreds of draft intelligence reports sat for months before DHS officials made a decision about whether to release them to the intelligence community. DHS published many reports so late - typically months late, but sometimes nearly a year after they were filed - that many were considered "obsolete" by the time they were released.

• Most reporting was not about terrorists or possible terrorist plots, but about criminal activity, largely arrest reports pertaining to drug, cash or human smuggling.

• Some terrorism-related "intelligence" reporting was based on older news releases or media accounts.

• Some terrorism-related reporting also appeared to be a slower-moving duplicate of information shared with the National Counterterrorism Center through a much quicker process run by the Federal Bureau of Investigation's (FBI's) Terrorist Screening Center.

The report cites instances where fusion centers collected intelligence and prepared draft reports about the titles of books American Muslims read and a US citizen who gave a motivational speech and lecture on "positive parenting" at a Muslim organization; the information was then illegally retained on government computers at DHS headquarters.

A fusion center in California wrote a report on an infamous motorcycle gang known as the Mongols, which had distributed flyers to its members advising them to be "courteous" if stopped by police officers.

"There is nothing illegal or remotely objectionable in this report," a DHS analyst wrote on a copy of a copy of the draft report about the information collected on the motorcycle club. "The advice given to the groups' members is protected by the First Amendment. The organization does not advocate the violation of ANY laws - on the contrary, they tell their members to obey the law."

Civil liberties groups, notably the American Civil Liberties Union, have long raised concerns about the way fusion centers often infringe on Americans' privacy and free speech, claiming the centers operate "with little oversight at a time when new technology, government powers and zeal in the 'war on terrorism' are combining to threaten our privacy at an unprecedented level and turn America into a surveillance society."

The subcommitte agreed with that assessment and said DHS failed to "adequately implement a fusion center program that would produce the results it promised."

However, Congress, "which has repeatedly chosen to support and praise fusion center efforts, without providing the oversight and direction necessary to make sure those efforts were cost effective and useful," also bears "significant responsibility for these failures," the report said.

However, in thousands of pages of documents Truthout obtained from DHS under the Freedom of Information Act (FOIA), fusion centers were shown to be at the center of what some DHS officials said was unconstitutional surveillance involving the Occupy Wall Street (OWS) movement, beginning in September 2011. Some of those documents are emails that show Chandler was aware that fusion centers might have been skirting the law by collecting intelligence and issuing unauthorized reports on OWS.

The integrity of the fusion centers' reports was also criticized by current and former officials interviewed by the subcommittee. One DHS official told subcommittee investigators that "a lot of the [fusion center reporting] was predominantly useless information," while a former fusion center branch chief, who said he was sometimes "proud of the intelligence his unit produced," admitted "there were times when it was, 'what a bunch of crap is coming through.'"

DHS officials apparently were aware of the "deficiencies" at fusion centers but withheld the information from Congress.

"Regarding the centers themselves, the subcommittee investigation learned that a 2010 assessment of state and local fusion centers conducted at the request of DHS found widespread deficiencies in the centers' basic counterterrorism information-sharing capabilities," the report said. "DHS did not share that report with Congress or discuss its findings publicly. When the subcommittee requested the assessment as part of its investigation, DHS at first denied it existed, then disputed whether it could be shared with Congress, before ultimately providing a copy."

The Senate subcommittee report, while scathing, doesn't call for DHS to stop supporting and funding fusion centers. Rather, the report calls for Congress and DHS to "revisit the statutory basis for DHS support of fusion centers." The report also suggested DHS "improve its oversight of federal grant funds supporting fusion centers; conduct promised assessments of fusion center information-sharing; and strengthen its protection of civil liberties in fusion center intelligence-reporting."

Jason Leopold is the author of the Los Angeles Times bestseller, News Junkie, a memoir. Visit jasonleopold.com for a preview. His most recent investigative report, "From Hopeful Immigrant to FBI Informant: The Inside Story of the Other Abu Zubaidah," is now available as an ebook. Follow Jason on Twitter: @JasonLeopold.